Runoff specialist Pro Global Insurance Solutions P.L.C. has set up a subsidiary in Rhode Island to offer insurers and reinsurers portfolio transfer services that take advantage of the state’s expanded runoff law.

ProTucket Insurance Co. will take on portfolios of business from solvent insurers and place them in a protected cell within the Rhode Island-licensed insurer. Currently in the U.S., insurers usually run off discontinued business in-house, but the practice of transferring portfolios of discontinued property/casualty business to a third party is well-established in other jurisdictions.

A spokesman for the Rhode Island insurance department said ProTucket was the first insurer established in the state to take advantage of the expanded law.

The value of U.S. property/casualty business that could take advantage of the Rhode Island law could be as much as $100 billion, Artur Niemczewski, CEO of London-based Pro Global, said Tuesday.

“We compared what we’ve seen in the U.K. and some of the early indications of what we’ve seen in the U.S. … It’s an educated guess,” he said.

Rhode Island amended its so-called Regulation 68 law in 2015 to allow any U.S. insurer or reinsurer, including U.S. units of foreign insurers, to transfer closed books of business or any “reasonably specified groups of policies” through novation.

Vermont has a more limited law allowing the transfer of closed nonadmitted commercial policies. Bills introduced in Oklahoma and Connecticut have similar provisions to Rhode Island’s Regulation 68 but they are still winding their ways through the state legislatures.

Regulation 68 was modeled on Part VII of the U.K.’s Financial Services and Markets Act 2000, which has produced hundreds of insurance business transfers to date.

A typical structure of the runoff arrangement would be for an insurer or reinsurer to transfer the liabilities and assets related to a discontinued book of business to a protected cell within ProTucket and then purchase reinsurance to cover the liabilities, said Mory Katz, head of Pro Global U.S. in New York.

The portfolio of business “is no longer part of the transferring company. They will have full legal and financial finality, and that part is completely new to the U.S. Previously, you would have to run it off yourself until the end of time, or you would have to sell the entire company,” he said.

Mr. Niemczewski said ProTucket has a pipeline of potential insurance clients interested in transferring portfolios, but the transfer process, which requires policyholder and court approval, can take a year or more to complete.